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War Prompts Thai Business Group to Trim Economic Forecast


Thailand's economy can grow only 2.6% this year if the wider impact of the war is more severe and fiscal measures have less positive effects than expected. Photo: AFP

 

Thailand’s leading business group on Tuesday trimmed its economic growth forecast for this year to 2.5%-4.0% from a previous forecast of 2.5%-4.5% due to the impact of the Russia-Ukraine war on global growth and energy prices.

The inflation forecast was raised to 3.5%-5.5% this year from a previous projection of 2.0%-3.0%, according to the Joint Standing Committee on Commerce, Industry and Banking.

The group said in a statement that it maintained its export growth outlook of 3.0%-5.0% this year.

Inflation, which hit the highest level in 13 years in March, is weighing on a recovery in domestic demand and purchasing power, the group said.

Southeast Asia’s second-largest economy grew 1.6% last year, among the lowest growth rates in the region.

On Tuesday, the World Bank also cut its economic growth forecast for Thailand to 2.9% this year from a previous forecast of 3.9%, with risks skewed to the downside.

The economy, however, can grow only 2.6% this year if the wider impact of the war is more severe and fiscal measures have less positive effects than expected, World Bank economist Warunthorn Puthong told a news conference.

Thailand’s benchmark interest rate is expected to remain at a record low of 0.50% as the economic recovery is likely to be gradual with tourism still weak, she added.

The economy is projected to return to pre-pandemic levels by early 2023, when growth is expected at 4.3%, the World Bank said.

 

  • Reuters, with additional editing by George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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